Before the Community Living Assistance Services and Supports Act folded into landmark health care reform legislation raised public consciousness of long-term care insurance, LTC got a shot in the arm with provisions of the Pension Protection Act (PPA) that took effect this year.
So-called combo long-term care products, which blend LTC with annuities and life insurance, could be popularized under changes to the PPA because of clearer pricing. Carl Friedrich, a consulting actuary and principal for Milliman, also has noted that the LTC portion of a combo plan often costs 35% to 50% of standalone coverage.
Now comes a report in Bank Investment Consultant, a sister publication to Voluntary.com InBrief, suggesting that hybrid annuities that include LTC riders are expected to be a hot product on brokerage platforms when product providers ramp up their offerings.
Scott Stathis, Kehrer-LIMRA’s chief operating officer and managing director, offered this assessment at the latest Annuity Product Management Roundtable in Chapel Hill, N.C., featuring 15 large and community banks. In a Kehrer-LIMRA poll at the event, 57% of the bankers thought hybrid annuities with an LTC component would likely be the most palatable of seven annuity types.
In a related development, Sun Life Financial Inc. expects to launch an LTC-life insurance combo product called Sun Care in the fourth quarter and a second hybrid still reportedly on the drawing board that would combine an annuity with LTC features. Lincoln National Life Insurance Co. already offers an LTC-life insurance combo in its MoneyGuard Reserve offering.
